Page 144 5-12. Jefferson County established a capital project fund in 2023 to build low-income housing...

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Page 144 5-12. Jefferson County established a capital project fund in 2023 to build low-income housing with the transfer of $100,000 from the General Fund. A portion of that was expended on engineering studies in 2023. The following transactions occurred during 2024: Cash Fund Balance Capital Project Fund Trial Balance: December 31, 2023 Debits $72,000 Credits $72,000 1. April 1, 2024, 3.5 percent bonds with a face value of $800,000 were issued in the amount of $803,000. The bond premium was transferred to the debt service fund. 2. The County received notice that it had met eligibility requirements for a federal government grant intended to support the capital project in the amount of $250,000. The grant (cash) will be received when the project is completed in February 2025. 3. The County issued a contract for the construction in the amount of $1,015,000. 4. The contractor periodically bills the County for construction completed to date. During the year, bills totaling $680,000 were received. By year-end, a total of $605,000 had been paid. Jefferson County established a debt service fund to make interest and principal payments on the bonds issued in item 1 above. Bond payments are made on October 1 and April 1 of each year. Interest is based on an annual rate of 4 percent. A principal payment of $27,000 is due in 2024. The following transactions occurred during 2024: 5. The bond premium was received by the debt service fund through transfer from the capital project fund. 6. September 30, $41,000 was transferred from the General Fund for the October 1 bond payment. 7. The first debt service payment was made on October 1, 2024. The Elwood Family Reading Enrichment Fund was established in December 2023, funded by a bequest with the legal restriction that only earnings, and not principal, can be used to purchase books for the Library in Jefferson County. The principal amount that must be maintained is $500,000. The following transactions occurred during 2024: Receivable from Grantor Permanent Fund Trial Balance: December 31, 2023 Nonspendable Fund Balance-Library Purchases Debits Credits $500,000 $500,000 8. The Elwood family pledge of $500,000 was received in donated corporate bonds with a fair value of $400,000 and the balance in cash. 9. $90,000 was invested in U.S. government securities. 10. Interest in the amount of $16,500 was received in cash during the year. 11. During the year, books totaling $13,000 were ordered for the library. 12. During the year, the library reported receiving books with an invoice amount totaling $11,500; $10,700 of the amounts due for book purchases had been paid by year-end. 13. An additional $850 of interest had accrued on the investments at December 31 and will be received in January of next year. 14. The corporate bonds had a market value of $400,950 as of December 31. Required: Using the Excel template provided (a separate tab is provided for each of the requirements): a. Prepare journal entries recording events 1 to 14 for the capital projects, debt service, and permanent funds. b. Post the journal entries to T-accounts. c. Prepare closing entries. d. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the Governmental Funds (the General Fund financial statements have already been prepared). e. Prepare a Balance Sheet for the Governmental Funds, assuming that unexpended spendable resources in the capital projects and permanent funds are classified as restricted, and unexpended spendable resources in the debt service fund are classified as assigned. 3 Jefferson County Capital Project Fund Journal Entries December 31, 2020 Account Title 1 Cash Debits Credits 803,000 Other Financing Sources-Proceeds of Bonds Other Financing Sources-Premium on Bonds 800,000 3,000 Other Financing Uses-Transfer Out 3,000 Cash 3,000 2 Due From Other Governments 250,000 Intergovermental Revenues 250,000 3 Encumbrances 1,015,000 Budgetary Fund Balance-Reserve fir Encumbrances 1,015,000 4 Expenditures:Capital Outlay 680,000 Contracts Payable 680,000 Budgetary Fund Balance-Reserve for Encumbrances 680,000 Encumbrances 680,000 Contracts Payable 605,000 Cash 605,000 Jefferson County Debt Service Fund Journal Entries December 31, 2020 Account Title Debits Credits 5 Cash 3,000 Other Financing Sources-Transfers In 3,000 6 Cash 41,000 Other Financing Sources-Transfer In 41,000 7 Expenditures-Bond Principal 27,000 Expenditures-Bond Intrest 14,000 Cash 41,000 -90-2345678101234567890-234567890-23 Jefferson County Permanent Fund (Elwood Family Reading Enrichment) Journal Entries December 31, 2020 8 Account Title Cash Debits Credits 100,000 Investments in Corporate Bonds 400,000 Receivable from Grantor 500,000 9 Investment in US Government Securities 90,000 Cash 90,000 10 Cash 16,500 Revenues- Investment Income-Intrest 16,500 Investments in Corporate Bonds 400,000 Receivable from Grantor 500,000 9 Investment in US Government Securities 90,000 Cash 90,000 10 Cash 16,500 Revenues- Investment Income-Intrest 16,500 11 NO ENTRY 12 Expenditures -Library Accounts Payable Accounts Payable 11,500 11,500 10,700 10,700 Cash 13 Intrest Receivable 850 Revenues- Investments Income-Intrest 850 14 Investments in Corporate Bonds 950 Revenues -Net Increase in Fair Value of Investments 950 4,751,500 4,751,500 1 3 5 7 B 9 1 3 4. 5 B 9 1 2 CAPITAL PROJECTS FUND GENERAL LEDGER DUE FROM OTHER GOVERNMENTS bb CASH 72,000 2 250,000 1 803,000 3,000 1 605,000 4 267,000 INTERGOVERNMENTAL REVENUES 250,000 CONTRACTS PAYABLE FUND BALANCE 680,000 4 72,000 bb 4 605,000 75,000 72,000 CAPITAL EXPENDITURES OTHER FINANCING USES TRANSFERS OUT OTHER FINANCING SOURCES PROCEEDS OF BONDS 250,000 2 4 680,000 1 3,000 800,000 1 250,000 OTHER FINANCING SOURCES PREMIUM ON BONDS 3,000 1 680,000 3,000 Total debit balances Total credit balances 1,535,000 1,535,000 DERT SERVICE FUND CENERAL LEDGER. 3,000 BUDGETARY FUND BALANCE RESERVE FOR ENCUMBRANCES 4 680,000 800,000 ENCUMBRANCES 1,015,000 3 3 1,015,000 335,000 680,000 335,000 Total debit balances 1,535,000 Total credit balances 1,535,000 DEBT SERVICE FUND GENERAL LEDGER CASH 156 bb 3,000 41,000 41,000 7 3,000 FUND BALANCE - bb OTHER FINANCING SOURCES EXPENDITURES TRANSFERS IN BOND PRINCIPAL 3,000 5 41,000 7 27,000 7 44,000 27,000 > EXPENDITURES BOND INTEREST 14,000 IVI N 14,000 Total debit balances Total credit balances 44,000 44,000 PERMANENT FUND - ELWOOD FAMILY BOOK FUND GENERAL LEDGER , 5. PERMANENT FUND - ELWOOD FAMILY BOOK FUND GENERAL LEDGER CASH bb 8 100,000 90,000 9 10 16,500 10,700 12 bb RECEIVABLE FROM GRANTOR 500,000 INVESTMENTS IN CORPORATE BONDS 8 400,000 9 500,000 8 14 950 400,950 13 15,800 INTEREST RECEIVABLE 850 ACCOUNTS PAYABLE FUND BALANCE 11,500 12 500,000 bb 12 10,700 850 800 500,000 REVENUES - REVENUES - INVESTMENT INCOME INVESTMENT INCOME INTEREST NET INCREASE IN FAIR VALUE OF INVESTMENTS EXPENDITURES LIBRARY 16,500 10 950 14 12 11,500 850 13 17,350 INVESTMENTS IN US GOV'T SECURITIES 90,000 90,000 950 11,500 Total debit balances 519,100 Total credit balances 519,100 A B Jefferson County Capital project Fund Closing Entries December 31, 2020 E T G H Account Title Debits Credits Intergovernmental Revenues 250,000 Other Financing Sources-Proceeds on B 800,000 FUND BALANCE Other Financing Sources-Premium on Bc Expenditures Capital Outlay Other Financing Sources-Transfer out Fund balance 3,000 680,000 72,000 bb 370,000 closing entry 3,000 370,000 442,000 Non- spendable Fund Balance Restricted Committed Assigned Unassigned 442,000 Total 442,000 Account Title Jefferson County Debt service fund closing entries December 31, 2020 Other Financing Sources-Transfer in Expenditure-Bond Principal Expenditure- Bond Intresr\t Fund Balance Fund Balance Account Title Debits Credits FUND BALANCE 44,000 DEBT SERVICE 27,000 14,000 3,000 bb 3,000 closing entry 3,000 Non- spendable Restricted Committed Assigned Unassigned 3,000 Total 3,000 Jefferson County Permanent Fund Closing Entries December 31, 2020 Revenues-Investment Income-Intrest Revenues- Investment Income- Net Increase in Fair Value of Investments Expenditures-Library Fund Balance Fund Balance Debits Credits PERMANENT FUND 17,350 FUND BALANCE 950 11,500 6,800 500,000 bb 6,800 closing entry 506,800 Non- spendable Restricted Committed 500,000 Assigned Unassigned 6,800 Total 506,800 A B D E F G General Fund Capital Projects Fund Total Debt Service Permanent Governmental Fund Fund Funds $ 128,148 1 2 3 Cash Assets 4 Investment in corporate bonds 5 Investment in US securities 6 Taxes Receivable - net 7 Due from other governments 8 Accrued interest receivable 9 Supplies Inventory $ 128,148 51,325 10 Total Assets 51,325 350 350 $ 179,823 $ $ - $ - $ 179,823 11 12 Liabilities, Deferred Inflows and Fund Balances 13 Liabilities 14 Accounts Payable H 15 Wages Payable 2,000 850 2,000 850 16 Contracts payable 17 Total Liabilities 2,850 2,850 18 Deferred Inflows of Resources 19 Property Taxes 22,600 22,600 20 21 Fund Balances 22 Nonspendable 23 Inventories 24 Permanent Fund principal 25 Restricted: for low income housing projects 26 27 Assigned Library purchases General Government operations 350 350 28 800 2333333 29 Debt Service 30 Unassigned 31 Total Fund Balances 153,223 154,373 Total Liabilities and Fund Balances $ 179,823 $ $ 34 35 EA 800 153,223 154,373 179,823 Page 144 5-12. Jefferson County established a capital project fund in 2023 to build low-income housing with the transfer of $100,000 from the General Fund. A portion of that was expended on engineering studies in 2023. The following transactions occurred during 2024: Cash Fund Balance Capital Project Fund Trial Balance: December 31, 2023 Debits $72,000 Credits $72,000 1. April 1, 2024, 3.5 percent bonds with a face value of $800,000 were issued in the amount of $803,000. The bond premium was transferred to the debt service fund. 2. The County received notice that it had met eligibility requirements for a federal government grant intended to support the capital project in the amount of $250,000. The grant (cash) will be received when the project is completed in February 2025. 3. The County issued a contract for the construction in the amount of $1,015,000. 4. The contractor periodically bills the County for construction completed to date. During the year, bills totaling $680,000 were received. By year-end, a total of $605,000 had been paid. Jefferson County established a debt service fund to make interest and principal payments on the bonds issued in item 1 above. Bond payments are made on October 1 and April 1 of each year. Interest is based on an annual rate of 4 percent. A principal payment of $27,000 is due in 2024. The following transactions occurred during 2024: 5. The bond premium was received by the debt service fund through transfer from the capital project fund. 6. September 30, $41,000 was transferred from the General Fund for the October 1 bond payment. 7. The first debt service payment was made on October 1, 2024. The Elwood Family Reading Enrichment Fund was established in December 2023, funded by a bequest with the legal restriction that only earnings, and not principal, can be used to purchase books for the Library in Jefferson County. The principal amount that must be maintained is $500,000. The following transactions occurred during 2024: Receivable from Grantor Permanent Fund Trial Balance: December 31, 2023 Nonspendable Fund Balance-Library Purchases Debits Credits $500,000 $500,000 8. The Elwood family pledge of $500,000 was received in donated corporate bonds with a fair value of $400,000 and the balance in cash. 9. $90,000 was invested in U.S. government securities. 10. Interest in the amount of $16,500 was received in cash during the year. 11. During the year, books totaling $13,000 were ordered for the library. 12. During the year, the library reported receiving books with an invoice amount totaling $11,500; $10,700 of the amounts due for book purchases had been paid by year-end. 13. An additional $850 of interest had accrued on the investments at December 31 and will be received in January of next year. 14. The corporate bonds had a market value of $400,950 as of December 31. Required: Using the Excel template provided (a separate tab is provided for each of the requirements): a. Prepare journal entries recording events 1 to 14 for the capital projects, debt service, and permanent funds. b. Post the journal entries to T-accounts. c. Prepare closing entries. d. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the Governmental Funds (the General Fund financial statements have already been prepared). e. Prepare a Balance Sheet for the Governmental Funds, assuming that unexpended spendable resources in the capital projects and permanent funds are classified as restricted, and unexpended spendable resources in the debt service fund are classified as assigned. 3 Jefferson County Capital Project Fund Journal Entries December 31, 2020 Account Title 1 Cash Debits Credits 803,000 Other Financing Sources-Proceeds of Bonds Other Financing Sources-Premium on Bonds 800,000 3,000 Other Financing Uses-Transfer Out 3,000 Cash 3,000 2 Due From Other Governments 250,000 Intergovermental Revenues 250,000 3 Encumbrances 1,015,000 Budgetary Fund Balance-Reserve fir Encumbrances 1,015,000 4 Expenditures:Capital Outlay 680,000 Contracts Payable 680,000 Budgetary Fund Balance-Reserve for Encumbrances 680,000 Encumbrances 680,000 Contracts Payable 605,000 Cash 605,000 Jefferson County Debt Service Fund Journal Entries December 31, 2020 Account Title Debits Credits 5 Cash 3,000 Other Financing Sources-Transfers In 3,000 6 Cash 41,000 Other Financing Sources-Transfer In 41,000 7 Expenditures-Bond Principal 27,000 Expenditures-Bond Intrest 14,000 Cash 41,000 -90-2345678101234567890-234567890-23 Jefferson County Permanent Fund (Elwood Family Reading Enrichment) Journal Entries December 31, 2020 8 Account Title Cash Debits Credits 100,000 Investments in Corporate Bonds 400,000 Receivable from Grantor 500,000 9 Investment in US Government Securities 90,000 Cash 90,000 10 Cash 16,500 Revenues- Investment Income-Intrest 16,500 Investments in Corporate Bonds 400,000 Receivable from Grantor 500,000 9 Investment in US Government Securities 90,000 Cash 90,000 10 Cash 16,500 Revenues- Investment Income-Intrest 16,500 11 NO ENTRY 12 Expenditures -Library Accounts Payable Accounts Payable 11,500 11,500 10,700 10,700 Cash 13 Intrest Receivable 850 Revenues- Investments Income-Intrest 850 14 Investments in Corporate Bonds 950 Revenues -Net Increase in Fair Value of Investments 950 4,751,500 4,751,500 1 3 5 7 B 9 1 3 4. 5 B 9 1 2 CAPITAL PROJECTS FUND GENERAL LEDGER DUE FROM OTHER GOVERNMENTS bb CASH 72,000 2 250,000 1 803,000 3,000 1 605,000 4 267,000 INTERGOVERNMENTAL REVENUES 250,000 CONTRACTS PAYABLE FUND BALANCE 680,000 4 72,000 bb 4 605,000 75,000 72,000 CAPITAL EXPENDITURES OTHER FINANCING USES TRANSFERS OUT OTHER FINANCING SOURCES PROCEEDS OF BONDS 250,000 2 4 680,000 1 3,000 800,000 1 250,000 OTHER FINANCING SOURCES PREMIUM ON BONDS 3,000 1 680,000 3,000 Total debit balances Total credit balances 1,535,000 1,535,000 DERT SERVICE FUND CENERAL LEDGER. 3,000 BUDGETARY FUND BALANCE RESERVE FOR ENCUMBRANCES 4 680,000 800,000 ENCUMBRANCES 1,015,000 3 3 1,015,000 335,000 680,000 335,000 Total debit balances 1,535,000 Total credit balances 1,535,000 DEBT SERVICE FUND GENERAL LEDGER CASH 156 bb 3,000 41,000 41,000 7 3,000 FUND BALANCE - bb OTHER FINANCING SOURCES EXPENDITURES TRANSFERS IN BOND PRINCIPAL 3,000 5 41,000 7 27,000 7 44,000 27,000 > EXPENDITURES BOND INTEREST 14,000 IVI N 14,000 Total debit balances Total credit balances 44,000 44,000 PERMANENT FUND - ELWOOD FAMILY BOOK FUND GENERAL LEDGER , 5. PERMANENT FUND - ELWOOD FAMILY BOOK FUND GENERAL LEDGER CASH bb 8 100,000 90,000 9 10 16,500 10,700 12 bb RECEIVABLE FROM GRANTOR 500,000 INVESTMENTS IN CORPORATE BONDS 8 400,000 9 500,000 8 14 950 400,950 13 15,800 INTEREST RECEIVABLE 850 ACCOUNTS PAYABLE FUND BALANCE 11,500 12 500,000 bb 12 10,700 850 800 500,000 REVENUES - REVENUES - INVESTMENT INCOME INVESTMENT INCOME INTEREST NET INCREASE IN FAIR VALUE OF INVESTMENTS EXPENDITURES LIBRARY 16,500 10 950 14 12 11,500 850 13 17,350 INVESTMENTS IN US GOV'T SECURITIES 90,000 90,000 950 11,500 Total debit balances 519,100 Total credit balances 519,100 A B Jefferson County Capital project Fund Closing Entries December 31, 2020 E T G H Account Title Debits Credits Intergovernmental Revenues 250,000 Other Financing Sources-Proceeds on B 800,000 FUND BALANCE Other Financing Sources-Premium on Bc Expenditures Capital Outlay Other Financing Sources-Transfer out Fund balance 3,000 680,000 72,000 bb 370,000 closing entry 3,000 370,000 442,000 Non- spendable Fund Balance Restricted Committed Assigned Unassigned 442,000 Total 442,000 Account Title Jefferson County Debt service fund closing entries December 31, 2020 Other Financing Sources-Transfer in Expenditure-Bond Principal Expenditure- Bond Intresr\t Fund Balance Fund Balance Account Title Debits Credits FUND BALANCE 44,000 DEBT SERVICE 27,000 14,000 3,000 bb 3,000 closing entry 3,000 Non- spendable Restricted Committed Assigned Unassigned 3,000 Total 3,000 Jefferson County Permanent Fund Closing Entries December 31, 2020 Revenues-Investment Income-Intrest Revenues- Investment Income- Net Increase in Fair Value of Investments Expenditures-Library Fund Balance Fund Balance Debits Credits PERMANENT FUND 17,350 FUND BALANCE 950 11,500 6,800 500,000 bb 6,800 closing entry 506,800 Non- spendable Restricted Committed 500,000 Assigned Unassigned 6,800 Total 506,800 A B D E F G General Fund Capital Projects Fund Total Debt Service Permanent Governmental Fund Fund Funds $ 128,148 1 2 3 Cash Assets 4 Investment in corporate bonds 5 Investment in US securities 6 Taxes Receivable - net 7 Due from other governments 8 Accrued interest receivable 9 Supplies Inventory $ 128,148 51,325 10 Total Assets 51,325 350 350 $ 179,823 $ $ - $ - $ 179,823 11 12 Liabilities, Deferred Inflows and Fund Balances 13 Liabilities 14 Accounts Payable H 15 Wages Payable 2,000 850 2,000 850 16 Contracts payable 17 Total Liabilities 2,850 2,850 18 Deferred Inflows of Resources 19 Property Taxes 22,600 22,600 20 21 Fund Balances 22 Nonspendable 23 Inventories 24 Permanent Fund principal 25 Restricted: for low income housing projects 26 27 Assigned Library purchases General Government operations 350 350 28 800 2333333 29 Debt Service 30 Unassigned 31 Total Fund Balances 153,223 154,373 Total Liabilities and Fund Balances $ 179,823 $ $ 34 35 EA 800 153,223 154,373 179,823